Reparations

By SVEN FELIX KELLERHOFF / DIE WELT / WORLDCRUNCH | Time.com – Tue, Sep 20, 2011


See also the Article in Greek Newspaper ΕΘΝΟΣ

This post is in partnership with Worldcrunch, a new global-news site that translates stories of note in foreign languages into English. The article below was originally published in Die Welt.

BERLIN – In the current debate about the possible bankruptcy of the Greek state, one largely dormant argument has recently resurfaced with increasing frequency: the widespread damage inflicted by the Nazi regime during World War II means that Germany still owes Greece major outstanding wartime reparations.

What is at stake? Without having been provoked, the Wehrmacht – the Third Reich’s armed forces – took over both Greece and Yugoslavia on April 6, 1941. In both countries, German soldiers set up a brutal occupation regime. As was usually the case in European nations invaded by the Germans, the high cost of the occupation was borne by the occupied country – and the Greek economy was plundered through forced exports.

This resulted in galloping inflation and a radically lower standard of living for Greeks. Additionally, the Third Reich forced the Greek National Bank to lend Hitler’s Germany 476 million reichsmarks interest-free.

After Germany’s surrender, the Allied powers organized the Paris Conference on Reparations in the fall of 1945. Greece laid claim to $10 billion, or half the total amount of $20 billion the Soviets suggested that Germany pay.

The suffering caused to Greece by the Nazis is undeniable. Yet at the same time, human suffering cannot really be measured. Independent historians unanimously agree that the total economically measurable damages suffered by Greece as a result of the German occupation, in both absolute numbers as well as proportionate to the population, put Greece in fourth place after Poland, the Soviet Union and Yugoslavia.

At the Paris Conference on Reparations, Greece was finally accorded 4.5% in material German reparation and 2.7% in other forms of reparations. Practically, this meant that Greece received mainly material goods – like machines made in West Germany – worth approximately $25 million, which in today’s money amounts to as much as $2.7 billion.

However, the stipulations made at the Paris conference were all but irrelevant given that the U.S. opposed heavy economic penalties. U.S. leaders recalled what happened after World War I, when Germany’s first democracy, the Weimar Republic, was massively weakened economically by having to pay off reparations. Indeed, one of the consequences of this policy was the rise of Hitler.


That is why under the terms of the 1953 London Debt Agreement, reparation payments were put off until a “peace treaty” was signed.
Another legal issue that has surfaced concerns the 476 million reichsmarks lent against its will to Germany by the Greek National Bank during the war. Without interest, the amount in today’s money would amount to $14 billion. With interest at 3% over 66 years, that would come to at least $95 billion. The problem is this: even just partial recognition of such a debt would create a precedent that could bring untold further claims in its wake.